The current reserve of $12.1MM plus the $5.2MM fair value mark on acquired loans would equate to a 1.21% reserve/loans.

Transcription

1 EARNINGS RELEASE Exhibit 99.1 CONTACT Rob Anderson Chief Financial Officer and Chief Administrative Officer (615) CapStar Reports Fully Diluted EPS of ($0.04) and Fully Diluted Operating EPS of $0.33 for 4Q 2018 CapStar Reports Record Fully Diluted Operating EPS of $1.19 for 2018 NASHVILLE, TN, January 24, 2018/GlobeNewswire/ -- CapStar Financial Holdings, Inc. ( CapStar ) (NASDAQ:CSTR) reported a net loss of ($0.7) million, or ($0.04) per share on a fully diluted basis, for the three months ended December 31, 2018, compared to net income of $0.0 million, or $0.01 per share on a fully diluted basis, for the three months ended December 31, Operating (1) net income was $6.2 million, or $0.33 per share on a fully diluted basis, for the three months ended December 31, 2018, compared to $3.7 million, or $0.28, for the three months ended December 31, Net income for the twelve months ended December 31, 2018 was $9.7 million, or $0.67 per share on a fully diluted basis, compared to net income of $1.5 million, or $0.12 per share on a fully diluted basis, for the twelve months ended December 31, Operating net income was $17.2 million, or $1.19 per share on a fully diluted basis, for the twelve months ended December 31, 2018, compared to $5.1 million, or $0.40, for the twelve months ended December 31, From a performance standpoint, 2018 was a good year for CapStar, said Claire W. Tucker, CapStar s president and chief executive officer. We initiated a quarterly dividend for our shareholders, were named a C&I leader in U.S. Small Business Banking by Greenwich Associates, and closed our acquisition of Athens Bancshares, Ms. Tucker continued. I am very proud of our team s efforts under very difficult circumstances. The sudden passing of CapStar Bank president Dan W. Hogan was a tragic loss for everyone who knew him, and he will be missed tremendously. However, the strength of the CapStar culture that Dan helped build and exemplified so well stood out in each of our associates when it mattered most. Our focus on caring for our customers and each other never wavered. Soundness The current reserve of $12.1MM plus the $5.2MM fair value mark on acquired loans would equate to a 1.21% reserve/loans. Current Criticized and Classified loans are at a low level, totaling 1.71% at December 31, 2018 compared to 2.64% at December 31, Non-performing assets as a percentage of total loans and other real estate owned was 0.21% at December 31, 2018 compared to 0.28% at December 31, Annualized net charge-offs to average loans was 1.27% for the three months ended December 31, 2018 compared to 0.15% for the same period in (1) For a discussion and reconciliation of the Non-GAAP operating measures that exclude merger-related costs unrelated to CapStar s normal operations, see the section titled Non-GAAP Disclaimer and the Non-GAAP financial measures section of the financial statements.

2 Annualized net charge-offs for the year ended December 31, 2018 totaled 0.39%, compared to 1.09% for the year ended December 31, The total risk based capital ratio was 12.84% at December 31, 2018 compared to 12.52% at December 31, CapStar s strategy remains one of sound, profitable growth. While charge-offs are never easy to accept, our current criticized loans are at historic low points and we feel very good about our asset quality going forward, Ms. Tucker continued. Profitability Operating measures exclude merger-related expenses unrelated to CapStar s normal operations. CapStar believes these measures are useful to investors as they exclude certain costs resulting from acquisition activity and allow investors to more clearly see the financial results of the CapStar s operations. Operating return on average assets ("ROAA") for the three months ended December 31, 2018 was 1.27% compared to 1.09% for the same period in Operating return on average tangible equity ("ROATE") for the three months ended December 31, 2018 was 12.36% compared to 10.25% for the same period in The net interest margin ( NIM ) for the three months ended December 31, 2018 was 3.89% compared to 3.30% for the same period in The operating efficiency ratio for the three months ended December 31, 2018 was 61.83% compared to 65.63% for the same period in Our profitability profile improved significantly with the closing of the Athens acquisition on October 1, 2018, said Rob Anderson, chief financial officer and chief administrative officer of CapStar. While competition for quality loans and core deposits remains fierce, we will stick to our discipline of sound, profitable, growth. Growth Average gross loans for the quarter ended December 31, 2018 increased 50.5% to $1.44 billion, compared to $956.4 million for the same period in o Excluding the impact of acquired loans, legacy CapStar loans increased 13.9% compared to the same period in Average deposits for the quarter ended December 31, 2018 increased 46.0% to $1.58 billion, compared to $1.1 billion for the same period in o Excluding the impact of acquired deposits, legacy CapStar deposits increased 4.1% compared to the same period in Average total assets for the quarter ended December 31, 2018 increased 46.0% to $1.94 billion, compared to $1.33 billion for the same period in With the acquisition of Athens, we experienced an increase in our loan portfolio of over 50% from the fourth quarter of Excluding the impact of acquired loans, legacy CapStar loans grew 14% since the end of last year as our bankers continue to provide excellent service and differentiate themselves with our customers, said Mr. Anderson. In addition, we continue to make good progress in our integration efforts with Athens Federal and are on track with our stated synergies and delivering on the economics of the merger at announcement. I m confident the combined organization will bring even stronger value to our shareholders, our customers and the communities in which we serve, Anderson concluded.

3 Dividend On January 24, 2019, the board of directors of CapStar approved a quarterly dividend of $0.04 per share that will be paid on or about February 25, 2019 to all shareholders of record of CapStar s capital stock as of the close of business on February 5, Conference Call and Webcast Information CapStar will host a conference call and webcast at 9:00 a.m. Central Time on Friday, January 25, During the call, management will review the fourth quarter results and operational highlights. Interested parties may listen to the call by dialing (844) The conference ID number is A simultaneous webcast may be accessed on CapStar s website at ir.capstarbank.com by clicking on News & Events. An archived version of the webcast will be available in the same location shortly after the live call has ended. About CapStar Financial Holdings, Inc. CapStar Financial Holdings, Inc. is a bank holding company headquartered in Nashville, Tennessee and operates primarily through its wholly owned subsidiary, CapStar Bank, a Tennessee-chartered state bank. CapStar Bank is a commercial bank that seeks to establish and maintain comprehensive relationships with its clients by delivering customized and creative banking solutions and superior client service. As of December 31, 2018, on a consolidated basis, CapStar had total assets of $1.96 billion, gross loans of $1.43 billion, total deposits of $1.57 billion, and shareholders equity of $254.4 million. Visit for more information. Forward-Looking Statements Certain statements in this earnings release are forward-looking statements that reflect CapStar s current views with respect to, among other things, CapStar s assets, business, cash flows, condition (financial or otherwise), credit quality, financial performance, liquidity, short and long-term performance goals, prospects, results of operations, strategic initiatives and the timing, benefits, costs and synergies of recently completed and future acquisition, disposition and other growth opportunities, including, without limitation, those relating to the acceptance by customers of Athens of CapStar s products and services, the ability of CapStar to meet expectations regarding the benefits, costs, synergies, and financial and operational impact of the Athens merger, the possibility that any of the anticipated benefits, costs, synergies and financial and operational improvements of the Athens merger will not be realized or will not be realized as expected, the possibility that the Athens merger integration may be more expensive or take more time to complete than anticipated, the opportunities to enhance market share in certain markets and market acceptance of CapStar are generally in new markets and CapStar s commitment to make contributions to Athens Federal Foundation. These statements are often, but not always, made through the use of words or phrases such as may, should, could, predict, potential, believe, will likely result, expect, continue, will, anticipate, seek, aspire, achieve, estimate, intend, plan, project, projection, forecast, roadmap, goal, guidance, target, would, and outlook, or the negative version of those words or other comparable words of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about CapStar s industry, management s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond CapStar s control. The inclusion of these forward-looking statements should not be regarded as a representation by CapStar or any other person that such expectations, estimates and projections will be achieved. Accordingly, CapStar cautions you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict. Although CapStar believes that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. There are or will be important factors that could cause CapStar s actual results to differ materially from those indicated in these forwardlooking statements, including, but not limited to, any factors identified in this earnings release as well as those factors that are detailed from time to time in CapStar s periodic and current reports filed with the Securities and Exchange Commission, including those factors included in the Company s Annual Report on Form 10-K for the year ended December 31, 2017 under the headings Item 1A. Risk Factors and Cautionary Note Regarding Forward Looking Statements and in the Company s Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. If one or more events related to these or other risks or uncertainties materialize, or if CapStar s underlying assumptions prove to be incorrect, actual results may differ materially from its forward-looking statements. Accordingly, you should not place

4 undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date of this earnings release, and CapStar does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law. New risks and uncertainties may emerge from time to time, and it is not possible for CapStar to predict their occurrence or how they will affect CapStar. Non-GAAP Disclaimer This earnings release includes the following financial measures that were prepared other than in accordance with generally accepted accounting principles in the United States ( non-gaap financial measure ): operating net income, operating diluted net income per share, operating return on average assets, operating return on average tangible equity, tangible book value per share and operating efficiency ratio. These non-gaap financial measures (i) provide useful information to management and investors that is supplementary to CapStar s financial condition, results of operations and cash flows computed in accordance with GAAP, (ii) enable a more complete understanding of factors and trends affecting CapStar s business, and (iii) allow investors to evaluate CapStar s performance in a manner similar to management, the financial services industry, bank stock analysts and bank regulators; however, CapStar acknowledges that these non-gaap financial measures have a number of limitations. As such, you should not view these non-gaap financial measures as a substitute for results determined in accordance with GAAP, and they are not necessarily comparable to non-gaap financial measures that other companies use. See below for a reconciliation of these non-gaap financial measures to the most directly comparable GAAP financial measure.

5 Consolidated Statements of Income (Loss) (unaudited) (dollars in thousands, except share data) Three Months Ended Year Ended December 31, December 31, Interest income: Loans, including fees $ 20,554 $ 11,666 $ 60,751 $ 45,601 Securities: Taxable 1, ,184 3,696 Tax-exempt ,201 1,230 Federal funds sold Restricted equity securities Interest-bearing deposits in financial institutions , Total interest income 22,900 13,124 67,781 51,515 Interest expense: Interest-bearing deposits 1, ,164 2,447 Savings and money market accounts 1, ,446 3,188 Time deposits 1, ,940 2,445 Federal funds purchased 3 13 Securities sold under agreements to repurchase Federal Home Loan Bank advances ,533 1,559 Total interest expense 5,184 2,606 16,089 9,652 Net interest income 17,716 10,518 51,692 41,863 Provision for loan losses 1,514 (30) 2,842 12,870 Net interest income after provision for loan losses 16,202 10,548 48,850 28,993 Noninterest income: Treasury management and other deposit service charges ,150 1,516 Net gain (loss) on sale of securities 1 (108) 3 (66) Tri-Net fees ,503 1,002 Mortgage banking income 1,324 1,621 5,653 6,238 Other noninterest income 3, ,150 2,218 Total noninterest income 6,387 2,736 15,459 10,908 Noninterest expense: Salaries and employee benefits 9,475 5,411 28,586 20,400 Data processing and software 1, ,835 2,786 Professional fees ,608 1,522 Occupancy ,336 2,025 Equipment ,471 2,071 Regulatory fees ,028 1,111 Merger related expenses 8,929 9,803 Other operating 1, ,820 3,850 Total noninterest expense 23,832 8,699 53,487 33,765 Income (loss) before income taxes (1,243) 4,585 10,822 6,136 Income tax expense (535) 4,494 1,167 4,635 Net income (loss) $ (708) $ 91 $ 9,655 $ 1,501 Per share information: Basic net income (loss) per share of common stock $ (0.04) $ 0.01 $ 0.73 $ 0.13 Diluted net income (loss) per share of common stock $ (0.04) $ 0.01 $ 0.67 $ 0.12 Weighted average shares outstanding: Basic 17,509,525 11,403,689 13,277,614 11,280,580 Diluted 18,716,562 12,938,288 14,480,347 12,803,511 This information is preliminary and based on company data available at the time of the presentation.

6 Selected Quarterly Financial Data (unaudited) (dollars in thousands, except share data) Five Quarter Comparison 12/31/18 9/30/18 6/30/18 3/31/18 12/31/17 Income Statement Data: Net interest income $ 17,716 $ 11,543 $ 11,587 $ 10,846 $ 10,518 Provision for loan losses 1, (30) Net interest income after provision for loan losses 16,202 11,062 11,418 10,168 10,548 Treasury management and other deposit service charges Net gain (loss) on sale of securities 1 (1) 3 (108) Tri-Net fees Mortgage banking income 1,324 1,634 1,383 1,313 1,621 Other noninterest income 3, Total noninterest income 6,387 3,218 2,765 3,088 2,736 Salaries and employee benefits 9,475 6,514 6,340 6,257 5,411 Data processing and software 1, Professional fees Occupancy Equipment Regulatory fees Merger related expenses 8, Other operating 1, Total noninterest expense 23,832 10,070 10,005 9,580 8,699 Net income (loss) before income tax expense (1,243) 4,210 4,178 3,676 4,585 Income tax (benefit) expense (535) ,494 Net income (loss) $ (708) $ 3,656 $ 3,513 $ 3,193 $ 91 Weighted average shares - basic 17,509,525 12,040,229 11,845,822 11,664,245 11,403,689 Weighted average shares - diluted 18,716,562 13,113,775 13,067,223 12,975,759 12,938,288 Net income (loss) per share, basic $ (0.04) $ 0.30 $ 0.30 $ 0.27 $ 0.01 Net income (loss) per share, diluted (0.04) Balance Sheet Data (at period end): Cash and cash equivalents $ 105,443 $ 52,589 $ 58,222 $ 51,125 $ 82,797 Securities available-for-sale 243, , , , ,621 Securities held-to-maturity 3,734 3,740 3,746 3,752 3,759 Loans held for sale 57,618 50,499 65,320 62,286 74,093 Total loans 1,429,794 1,073,870 1,046,525 1,031, ,537 Allowance for loan losses (12,113) (15,218) (14,705) (14,563) (13,721) Total assets 1,963,883 1,416,907 1,401,181 1,382,745 1,344,429 Non-interest-bearing deposits 289, , , , ,742 Interest-bearing deposits 1,280, , , , ,124 Federal Home Loan Bank advances 125, ,000 95, ,000 70,000 Total liabilities 1,709,504 1,259,397 1,248,035 1,234,052 1,197,483 Shareholders' equity $ 254,379 $ 157,510 $ 153,146 $ 148,693 $ 146,946 Total shares of common stock outstanding 17,724,721 12,125,122 11,931,131 11,773,358 11,582,026 Total shares of preferred stock outstanding 878, , , , ,049 Book value per share of common stock $ $ $ $ $ Tangible book value per share of common stock * Market value per common share $ $ $ $ $ Capital ratios: Total risk based capital % % % % % Tier 1 risk based capital % % % % % Common equity tier 1 capital % % % % % Leverage % % % % % *This metric is a non-gaap financial measure. See below for discussion and reconciliation to the most directly comparable GAAP financial measure. This information is preliminary and based on company data available at the time of the presentation.

7 Selected Quarterly Financial Data (unaudited) (dollars in thousands, except share data) Five Quarter Comparison 12/31/18 9/30/18 6/30/18 3/31/18 12/31/17 Average Balance Sheet Data: Cash and cash equivalents $ 83,560 $ 62,787 $ 63,064 $ 60,965 $ 64,850 Investment securities 256, , , , ,818 Loans held for sale 52,131 54,701 58,297 68,084 66,311 Loans 1,439,652 1,070,060 1,041, , ,441 Assets 1,940,991 1,421,873 1,396,359 1,351,129 1,329,621 Interest bearing deposits 1,271, , , , ,732 Deposits 1,579,250 1,147,274 1,138,400 1,111,182 1,081,380 Federal Home Loan Bank advances 102, ,728 99,121 84,533 92,554 Liabilities 1,695,181 1,265,610 1,244,824 1,202,854 1,181,954 Shareholders' equity $ 245,811 $ 156,264 $ 151,535 $ 148,276 $ 147,667 Performance Ratios: Annualized return on average assets -0.14% 1.02 % 1.01 % 0.96 % 0.03 % Annualized return on average equity -1.14% 9.28 % 9.30 % 8.74 % 0.25 % Net interest margin (1) 3.89 % 3.35 % 3.46 % 3.39 % 3.30 % Annualized Non-interest income to average assets 1.31 % 0.90 % 0.79 % 0.93 % 0.82 % Efficiency ratio 98.9 % 68.2 % 69.7 % 68.8 % 65.6 % Loans by Type (at period end): Commercial and industrial $ 404,600 $ 398,626 $ 386,065 $ 408,353 $ 373,248 Commercial real estate - owner occupied 141, , , , ,132 Commercial real estate - non-owner occupied 408, , , , ,490 Construction and development 174, ,799 96,580 91,953 82,586 Consumer real estate 253, , , , ,581 Consumer 25,615 8,274 9,671 9,524 6,862 Other $ 21,002 $ 19,792 $ 36,428 $ 28,750 $ 31,984 Asset Quality Data: Allowance for loan losses to total loans 0.85 % 1.42 % 1.41 % 1.41 % 1.45 % Allowance for loan losses to non-performing loans 583 % 271 % 271 % 1096 % 509 % Nonaccrual loans $ 2,078 $ 5,610 $ 5,419 $ 1,329 $ 2,695 Troubled debt restructurings 2,947 1,146 1,173 1,190 1,206 Loans - over 89 days past due and accruing Total non-performing loans 2,078 5,610 5,419 1,329 2,695 OREO and repossessed assets Total non-performing assets $ 3,066 $ 5,610 $ 5,419 $ 1,329 $ 2,695 Non-performing loans to total loans 0.15 % 0.52 % 0.52 % 0.13 % 0.28 % Non-performing assets to total assets 0.16 % 0.40 % 0.39 % 0.10 % 0.20 % Non-performing assets to total loans and OREO 0.21 % 0.52 % 0.52 % 0.13 % 0.28 % Annualized net charge-offs (recoveries) to average loans 1.27 % (0.01)% 0.01 % -0.07% 0.15 % Net charge-offs (recoveries) $ 4,620 $ (32) $ 27 $ (165) $ 372 Interest Rates and Yields: Loans 5.49 % 5.00 % 5.04 % 4.74 % 4.54 % Securities (1) 3.30 % 2.85 % 2.82 % 2.68 % 2.83 % Total interest-earning assets (1) 5.02 % 4.58 % 4.58 % 4.29 % 4.11 % Deposits 1.12 % 1.22 % 1.11 % 0.88 % 0.78 % Borrowings and repurchase agreements 2.76 % 2.53 % 2.53 % 2.35 % 2.04 % Total interest-bearing liabilities 1.50 % 1.64 % 1.51 % 1.27 % 1.12 % Other Information: Full-time equivalent employees This information is preliminary and based on company data available at the time of the presentation. (1) Net Interest Margin, Securities yields, and Total interest-earning asset yields are calculated on a tax-equivalent basis

8 Analysis of Interest Income and Expense, Rates and Yields (unaudited) (dollars in thousands) Average Outstanding Balance For the Three Months Ended December 31, Interest Average Average Interest Income/ Yield/ Outstanding Income/ Expense Rate Balance Expense Average Yield/ Rate Interest-Earning Assets Loans (1) $ 1,439,652 $ 19, % $ 956,441 $ 10, % Loans held for sale 52, % 66, % Securities: Taxable investment securities (2) 198,799 1, % 153, % Investment securities exempt from federal income tax (3) 57, % 48, % Total securities 256,595 2, % 202,818 1, % Cash balances in other banks 67, % 52, % Funds sold 1, % 2, % Total interest-earning assets 1,817,305 22, % 1,281,547 13, % Noninterest-earning assets 123,686 48,074 Total assets $ 1,940,991 $ 1,329,621 Interest-Bearing Liabilities Interest-bearing deposits: Interest-bearing transaction accounts $ 437,656 1, % $ 281, % Savings and money market deposits 496,319 1, % 346, % Time deposits 337,628 1, % 199, % Total interest-bearing deposits 1,271,603 4, % 827,732 2, % Borrowings and repurchase agreements 103, % 92, % Total interest-bearing liabilities 1,375,258 5, % 920,286 2, % Noninterest-bearing deposits 307, ,647 Total funding sources 1,682,905 1,173,933 Noninterest-bearing liabilities 12,275 8,021 Shareholders equity 245, ,667 Total liabilities and shareholders equity $ 1,940,991 $ 1,329,621 Net interest spread (4) 3.53 % 2.99 % Net interest income/margin (5) $ 17, % $ 10, % (1) Average loan balances include nonaccrual loans. Interest income on loans includes amortization of deferred loan fees, net of deferred loan costs. (2) Taxable investment securities include restricted equity securities. (3) Yields on tax exempt securities, total securities, and total interest-earning assets are shown on a tax equivalent basis. (4) Net interest spread is the average yield on total average interest-earning assets minus the average rate on total average interestbearing liabilities. (5) Net interest margin is annualized net interest income calculated on a tax equivalent basis divided by total average interest-earning assets for the period. This information is preliminary and based on company data available at the time of the presentation.

9 Analysis of Interest Income and Expense, Rates and Yields (unaudited) (dollars in thousands) Average Outstanding Balance For the Year Ended December 31, Interest Average Average Interest Income/ Yield/ Outstanding Income/ Expense Rate Balance Expense Average Yield/ Rate (Amounts in thousands) Interest-Earning Assets Loans (1) $ 1,134,836 $ 57, % $ 987,710 $ 43, % Loans held for sale 58,250 2, % 49,466 2, % Securities: Taxable investment securities (2) 166,287 4, % 166,538 4, % Investment securities exempt from federal income tax (3) 47,270 1, % 52,153 1, % Total securities 213,557 5, % 218,691 5, % Cash balances in other banks 54,454 1, % 49, % Funds sold 2, % 2, % Total interest-earning assets 1,463,579 67, % 1,308,375 51, % Noninterest-earning assets 65,336 49,419 Total assets $ 1,528,915 $ 1,357,794 Interest-Bearing Liabilities Interest-bearing deposits: Interest-bearing transaction accounts $ 330,952 4, % $ 301,411 2, % Savings and money market deposits 424,052 5, % 378,640 3, % Time deposits 227,760 3, % 194,892 2, % Total interest-bearing deposits 982,764 13, % 874,943 8, % Borrowings and repurchase agreements 99,450 2, % 98,289 1, % Total interest-bearing liabilities 1,082,214 16, % 973,232 9, % Noninterest-bearing deposits 262, ,687 Total funding sources 1,344,494 1,205,919 Noninterest-bearing liabilities 8,735 8,474 Shareholders equity 175, ,402 Total liabilities and shareholders equity $ 1,528,915 $ 1,357,795 Net interest spread (4) 3.17 % 3.00 % Net interest income/margin (5) $ 51, % $ 41, % (1) Average loan balances include nonaccrual loans. Interest income on loans includes amortization of deferred loan fees, net of deferred loan costs. (2) Taxable investment securities include restricted equity securities. (3) Yields on tax exempt securities, total securities, and total interest-earning assets are shown on a tax equivalent basis. (4) Net interest spread is the average yield on total average interest-earning assets minus the average rate on total average interestbearing liabilities. (5) Net interest margin is annualized net interest income calculated on a tax equivalent basis divided by total average interest-earning assets for the period. This information is preliminary and based on company data available at the time of the presentation.

10 Non-GAAP Financial Measures (unaudited) (dollars in thousands except share data) Three Months Ended December 31, 2018 September 30, 2018 June 30, 2018 March 31, 2018 December 31, 2017 Operating net income: Net income (loss) $ (708) $ 3,656 $ 3,513 $ 3,193 $ 91 Add: impact of tax reform* 3,562 Add: merger related expenses 8, Less: income tax impact of merger related expenses (1,985) (141) (88) Operating net income $ 6,236 $ 4,055 $ 3,760 $ 3,193 $ 3,653 Operating diluted net income per share of common stock: Operating net income $ 6,236 $ 4,055 $ 3,760 $ 3,193 $ 3,653 Weighted average shares - diluted 18,716,562 13,113,775 13,067,223 12,975,759 12,938,288 Operating diluted net income per share of common stock $ 0.33 $ 0.31 $ 0.29 $ 0.25 $ 0.28 average assets: Operating net income $ 6,236 $ 4,055 $ 3,760 $ 3,193 $ 3,653 Average assets $ 1,940,991 $ 1,421,873 $ 1,396,359 $ 1,351,129 $ 1,329,621 average assets 1.27 % 1.13 % 1.08 % 0.96 % 1.09 % average tangible equity: Average total shareholders' equity $ 245,811 $ 156,264 $ 151,535 $ 148,276 $ 147,667 Less: average intangible assets (45,687) (6,220) (6,228) (6,238) (6,248) Average tangible equity 200, , , , ,419 Operating net income $ 6,236 $ 4,055 $ 3,760 $ 3,193 $ 3,653 average tangible equity % % % 9.12 % % Operating efficiency ratio: Total noninterest expense $ 23,832 $ 10,070 $ 10,005 $ 9,580 $ 8,699 Less: merger related expenses (8,929) (540) (335) Total operating noninterest expense 14,903 9,530 9,670 9,580 8,699 Net interest income 17,716 11,543 11,587 10,846 10,518 Total noninterest income 6,387 3,218 2,765 3,088 2,736 Total revenues $ 24,103 $ 14,761 $ 14,352 $ 13,934 $ 13,254 Operating efficiency ratio: % % % % % December 31, 2018 September 30, 2018 June 30, 2018 March 31, 2018 December 31, 2017 Tangible Equity: Total shareholders' equity $ 254,379 $ 157,510 $ 153,146 $ 148,693 $ 146,946 Less: intangible assets (46,048) (6,219) (6,222) (6,232) (6,242) Tangible equity $ 208,331 $ 151,291 $ 146,924 $ 142,461 $ 140,704 Tangible Common Equity: Tangible equity $ 208,331 $ 151,291 $ 146,924 $ 142,461 $ 140,704 Less: preferred equity (9,000) (9,000) (9,000) (9,000) (9,000) Tangible common equity $ 199,331 $ 142,291 $ 137,924 $ 133,461 $ 131,704 Tangible Book Value per Share of Common Stock: Tangible common equity $ 199,331 $ 142,291 $ 137,924 $ 133,461 $ 131,704 Total shares of common stock outstanding 17,724,721 12,125,122 11,931,131 11,773,358 11,582,026 Tangible book value per share of common stock $ $ $ $ $ *As a result of the Tax Cuts and Jobs Act of 2017, which included a Federal corporate tax rate change from 35% to 21%, we revalued our deferred tax assets, which resulted in a $3.6 million increase in income tax expense for The non-gaap operating ratios above have excluded the impact of this transaction.

11 Non-GAAP Financial Measures (unaudited) (dollars in thousands except share data) Year Ended December 31, 2018 December 31, 2017 Operating net income: Net income $ 9,655 $ 1,501 Add: impact of tax reform* 3,562 Add: merger related expenses 9,803 Less: income tax impact of merger related expenses (2,213) Operating net income $ 17,245 $ 5,063 Operating diluted net income per share of common stock: Operating net income $ 17,245 $ 5,063 Weighted average shares - diluted 14,480,347 12,803,511 Operating diluted net income per share of common stock $ 1.19 $ 0.40 average assets: Operating net income $ 17,245 $ 5,063 Average assets $ 1,528,915 $ 1,357,794 average assets 1.13 % 0.37 % average tangible equity: Average total shareholders' equity $ 175,686 $ 143,402 Less: average intangible assets (16,174) (6,265) Average tangible equity 159, ,137 Operating net income $ 17,245 $ 5,063 average tangible equity % 3.69 % Operating efficiency ratio: Total noninterest expense $ 53,487 $ 33,765 Less: merger related expenses (9,803) Total operating noninterest expense 43,684 33,765 Net interest income 51,692 41,863 Total noninterest income 15,459 10,908 Total revenues $ 67,151 $ 52,771 Operating efficiency ratio: % % *As a result of the Tax Cuts and Jobs Act of 2017, which included a Federal corporate tax rate change from 35% to 21%, we revalued our deferred tax assets, which resulted in a $3.6 million increase in income tax expense for The non-gaap operating ratios above have excluded the impact of this transaction.